Scour goes Sour
Only 12 employees remain post copyright infringement suit
Such is the case with Scour.com, the Web-based service that allows users to access and share multimedia music and video files, including recently released films.
The Beverly Hills-based company, whose backers include former Walt Disney exec and agent Michael Ovitz, faced growing legal fees from the lawsuit filed in June by the Motion Picture Association of America and the Recording Industry Association of America, accusing the site of copyright infringement.
To cope with the costs, execs at the Netco sent 52 employees packing. Only 12 employees remain, including prexy-CEO Dan Rodrigues and four other company founders. The others are engineers who will keep the site running for as long as possible. And that may not be much longer. The company said that because of the pending litigation, their next round of financing has been canceled.
Scour started out as an one of the Wunderkinds of the Internet age. Developed in 1997 by a group of friends out of a UCLA dorm room, the site allowed Netizens to search for a variety of multimedia files, including MP3s and other audio and video content.
But much like Napster and MP3.com, the site's search-and-share function drew the ire of the major movie studios and the record labels. During the conference call announcing the lawsuit, MPAA prexy Jack Valenti said that with a simple Scour search, recently released films such as "X-Men" and "The Perfect Storm" could be easily downloaded.
Since then, some of the company's backers have distanced themselves from the service. CheckOut.com CEO Richard Wolpert resigned from Scour's board of directors in January and reiterated that decision by issuing a statement when the lawsuit was filed. Ovitz, whose stake in Scour once amounted to a 51% controlling interest, has reduced his holdings to roughly 20%.
In addition to its Scour Exchange online community for multimedia file sharing, Scour also offers an online radio service, Scour Caster. Those laid off were in sales, marketing and engineering slots in the content development and production divisions.
No hearing date has been set in the pending lawsuit, but Scour's attorneys plan to file a response to the plantiffs' complaint.
Atomic Bomb
Note to all Netcasters: When naming a Web site, avoid the word "pop." It seems to bring companies bad luck. Really bad luck.
Santa Monica-based Netcaster Atomicpop.com, founded by the former MCA music and CBS records topper Al Teller, recently bit the big one and laid off its remaining 25 staff members. The company had let go several employees two weeks prior.
Primarily a music site offering downloadable tracks from artists ranging from the Pixies to Public Enemy, the site also has. Aside from music, content included short films, cartoons and games.
As usual, the official cause of death was lack of funding. Atomic Pop's former investors included Teller and New York-based firm Rare Medium.
Pretty In Pinkslips
MXG, the teen girl Web site (www.mxgonline.com), and more recently, the television and publishing company, pinkslipped 44 of its 87 employees after an unsuccessful search for more venture capital or a buyer with a yen for bailouts.
The company may have tried to accomplish too much too soon. Earlier this year, MXG launched a television division and publishing arm while embarking on a $10 million branding campaign.
After receiving $26 million last November from Barry Diller's USA Networks, MXG announced plans to launch its new TV unit. The company hired Rob Swartz, a former exec at Walt Disney's Touchstone Television, to head the division.
MXG had inked a deal with Fox Family Channel to produce 26 episodes of a show called "MXG Beach Countdown," which started airing in July. The company was also in negotiations with the USA Networks to produce a teen-based show.
MXG sells clothes, accessories and music online as well as through its recently suspended magazine and catalog. Company will continue to run its Web sites and TV production unit.
Torch Extinguished
The latest digital-media company to downsize is Bluetorch, an extreme sports effort from the Broadband Interactive Group.
The Irvine-based company recently said "adios" to 64 employees, primarily from their print and Web departments. Sales, marketing and finance positions were also affected. Before the layoffs, the company said it had approximately 140 staffers.
Bluetorch's cross-media network originally operated in four areas, with a daily one-hour TV show ("Bluetorch TV" on Fox Sports Net), an Internet portal (www.bluetorch.com), print magazines and a live-events division.
According to the company, Bluetorch's Web site will be scaled back but will continue to support the TV show. Live events will also continue. However, Bluetorch killed all of its print titles, including Wave Action, Pit Bodyboard, Wakeboard and MX Rage. Skate and Swerve, two magazines the company planned to release later this year will also be dropped.
BIG said the layoffs were a result of a refocusing of Bluetorch's business plan. Its growing TV and Interactive TV endeavors are being viewed as a quicker path to profitability than the Web site and free print magazines. BIG has a strong affiliation with set-top box manufacturer Broadcom and is repped by Endeavor.
